Total loss of credibility is the issue.
No one knows what the real reserves are, real cost of replacement, or real cost of production.
Before putting a price on a stock you first want to know whether you are looking at a cash cow, or at a cash blackhole.
I topped up around 2.70 18 months ago, and finally let the last go in Aug around 1.50
At both times seemed cheap, but trouble was that with hindsight the information has always suspect.
The last time I got as close to taken for a mug was probably ION, ended up with 50% losses instead of with nothing on liquidation. Quitting is always a tough call, USA pog may yet make current sp a bargain, but longterm credibility is the key issue - they DON'T deliver, then they don't tell you about it, the reserve downgrades (and failure to convert discoveries to the expected reserves) are sneaked out.
Fact is USA producers have been fleeing the shallow GOM, as they can't make a decent return there. PSA fluked the rise of pog to 8/GJ for the previously subeconomic Vermillion but have lost ever since. Need more than the current 10/GJ to make this swiss cheese acreage economically really attractive.
EL
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